About this paper
With enhanced regulatory pressure, banks must continuously evaluate their risks. To meet these demands, the BSA/AML industry has turned to analytical/statistical methodologies to reduce false-positive alerts, increase monitoring coverage and reduce the rapidly escalating financial cost of maintaining their AML programs. An effective AML transaction monitoring strategy includes segmenting the customer base by analyzing customer activity and risk characteristics in order to monitor them more effectively. This paper explains how to blend both quantitative and qualitative methods to tune scenarios to identify the activity that poses the most risk to the bank.